All entrepreneurs launch with the hope that their businesses will live forever – or at least survive the next hundred years. They develop long-term business plans, chart growth paths, and seek advice from veteran business owners. Those words of wisdom likely don’t advise them to find a way to “cannibalize” their own companies.
But even if your company hits the hundred-year mark, you should always be looking for ways to revolutionize your initial idea before someone else does. No cautionary tale better illustrates this point than Kodak.
Most people would be surprised to discover that Kodak invented the digital camera, but it didn’t commercialize it for fear of jeopardizing its film business. By the time Kodak realized its digital camera prototype was a game changer, it was too late. Canon and Fujifilm had already established a significant lead in the digital camera market. By 2012, at 130 years old, Kodak was left with no choice but to file for bankruptcy protection.
If your business doesn’t continue to innovate and respond to changing market landscapes and consumer needs, it will die. And it’s better to kill it off with a bigger and better iteration than to wait for someone else to.
Why Innovation Starts Now
I recently made the difficult decision to launch SuperTasker, an evolution of my existing business, PeoplePerHour (PPH). Although they’re currently two separate services, there’s a good chance that SuperTasker will at least partially cannibalize PPH.
Stock-keeping units (SKUs) have long been on the product scene for classifying all things made and sold. But we’re the first company to commoditize creative work through SKUs to offer a new level of quality and price standardization.
If your new company solves a long-suffered pain point, you owe it to yourself to introduce it to the market at all costs — even if it means potentially cannibalizing a successful company.
But how do you know when to pull the trigger? Sometimes, the time is right simply because you’ve come to a crossroads as a company. You’re losing money, market share, or customers. It’s an innovate-or-die situation.
Other times, innovation is just part of a cycle. While it should be built into the fabric of your company, this often isn’t the case. In fact, the average life span of an S&P 500 company plummeted from 67 years in the 1920s to 15 years in 2012. Organizations can no longer rest on their laurels in the face of rapid change.
To spur innovation and prepare to potentially cannibalize your company, follow these five steps:
Look at Nokia and Samsung. Formerly leaders in the mobile space, the youngest generation of mobile users likely doesn’t even know their names. These companies were giants; few could have imagined that they could so easily be knocked off their perch. But they were too afraid to innovate and move away from the safety they already knew. Along came Steve Jobs and Apple, and the rest is history.
We’re still in the early days of SuperTasker, so I can’t say with certainty whether it will cannibalize PPH. However, the feedback on the product has been great; clients enjoy having their work turned around efficiently with a low-touch service. Naturally, this will cannibalize a portion of PPH’s design and digital work, but that’s what progress is all about. I’m not afraid to evolve, and you shouldn’t be, either.
Your company must innovate – or someone else’s will. If rebelling against your initial idea means you can deliver a groundbreaking product, why wouldn’t you take the plunge?
About the Author
Xenios Thrasyvoulou is the founder of SuperTasker and PeoplePerHour. He is also a passionate PPHer, an avid blogger, and a lover of art, design, and all things quirky and minimal, but words in particular.